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Zorluk: KolayNon-Systematic and Credit Risks

An investor holds corporate bonds issued by a commercial manufacturing company. If the issuing firm suffers severe financial losses and fails to make a scheduled coupon payment to bondholders, which risk has materialized?

  1. Credit riskCevap
  2. B
    Interest rate risk
  3. C
    Market risk
  4. D
    Purchasing power risk

Cevap

Credit risk materialized because the corporate issuer failed to meet its contractual obligation to pay scheduled interest to bondholders.
Credit risk, or default risk, specifically measures the likelihood that a borrower or debt issuer will be financially unable to make timely interest or principal payments.

Adım Adım Çözüm

1
Identify the event described in the question stem.
The corporate bond issuer suffered financial distress and defaulted on a scheduled coupon payment.
Failing to pay principal or interest when due is the definition of default.
2
Match the event to the corresponding category of risk.
The failure of a specific debt issuer to meet financial commitments represents credit (default) risk.
Credit risk measures an issuer's financial capability to service its debt obligations.

Anahtar Kavram

Credit risk (default risk) is a non-systematic risk specific to a debt security's issuer failing to pay principal or interest.
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Konular

Non-Systematic and Credit Risks

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